Let’s just get one thing straight — anyone who’s in the real estate business — whether they’ve done one, 100, or perhaps hasn’t even completed their first deal yet — we’ve all experienced REJECTION.

And not just a solid “NO.” LOTS of stuff like this:

“Who the *%#! are you?? How did you get my number? I’m calling the cops!” or,

“I would have to be an absolute buffoon to accept that offer. Who do you think you’re dealing with?” and my personal favorite,

“I’ve got a 9mm pistol with your name written all over it if you contact me again.”

Yikes! And then there’s the WORST kind of NO — the one that disguises itself as a YES — which you only uncover after hours and possibly days of follow up — sometimes EVEN AFTER you have a signed contract — where the seller just drops off the face of the Earth. In fact, we just had a deal where the sellers, after responding to our marketing and weeks of follow-up, finally agreed to meet, knowing they had to act before the foreclosure auction date. They didn’t use e-mail, and instead required us to drive to their home (about 40 minutes each way, ALWAYS in rush hour) 3 separate times, to get paperwork signed. And after we got it all signed? Nothing. They stopped replying to calls, e-mails, etc. Frustrating.

Or there’s the 6-unit building I had under agreement, all set to close the next day. The seller was one of those who owned the building free and clear, and just wanted enough to buy a trailer and live off the grid where he could prepare for the apocalypse. He wanted NO US dollars at closing — instead, we had to pay him $15K in gold coins that ONLY “Jeffrey down the street at ABC Coin Store can git, dropped in a paper bag with my name on it.” My closing attorney laughed, but we had it all set to go — until 3 hours before the closing, when he had a mental breakdown and threatened to kill his tenants and himself if we moved forward with the closing. Needless to say, I rarely hold people to contracts when they are that extreme.

It happens. We’re in a sensitive business, one where people are coming from all facets and stages of life — elderly folks looking to move into assisted living, divorcing couples who hate each other, children of recently deceased parents who are being bombarded with marketing and spam, people who love THINGS instead of people and collect items that fill up every room of their home to fill the empty void in their hearts and souls (worse – it could be CATS!), etc. and so on.

The question becomes how do we, as real estate problem solvers and marketers, KEEP GOING after hearng NO, experiencing REJECTION time and again, and then having deals that explode and turn into big wastes of time and effort? How do we keep going to that NEXT call back, helping that NEXT person who needs us when it’s almost CERTAIN we’ll be stomped on again and again?

Whoa! Did you feel the weight of what I just wrote? [Moment of silence.]

Ok, first, you need to remember that NEW SELLERS HAVE NO KNOWLEDGE OF YOUR LAST CALL/VISIT. Every single one of them has their own unique problem or reason for calling YOU. It’s up to YOU to find out WHY they need your services — and do NOT transfer the energy from any previous negative dealings into a new call or visit.

Imagine if your phone was completely flooded with calls, so that when one seller swears at you and makes you take them off your list, you need to let them go because you have another call coming in from a legitimate person who has already accepted their situation and they know they need you??

Different ballgame, right?

In any event, friends, be it real estate or any other business, we are in the sales business, and we need to smile and hold our heads up high the entire time. Sometimes the only thing we’ll have to rely on is our vision — our vision of helping sellers and the neighborhoods we’re investing in, the vision of our business we want to share with the community, and our vision of bettering our own lives and families — our businesses and missions are bigger and deeper than any amount of NOs or rejection we could go through.

And remember, if you’re here and doing this business as you should, you should feel MORALLY and ETHICALLY obligated to share your services because of how much good they are providing in your local communities. This is another reason why I treasure positive testimonials from my sellers and neighbors so much — when times get tough, THEY keep me going.

You got this. Wipe the sweat, blood, and tears from your face, and keep on changing lives.

I find people getting started in real estate investing are often so focused on the details and fine points of real estate and hunting for their first deal that they skip right over the steps necessary to create a firm foundation for their business. I know these steps can seem tedious, especially if you’re raring to get out and start breaking into meth labs, but trust me — they will pay dividends for years to come and you’ll thank me later.

In fact, Chapter 2 of The Complete Dealflow System is entitled “Business Set-up & Preparation” and walks through the five steps I recommend to establish your business and systems and procedures that will provide you with the best start possible. Here’s an excerpt to get you started:

Step 1: Set up a Contact Database & Create Categories

If your network is your vital component, your contact database is how you maintain, organize, and grow your relationships.

You need a place to organize your contacts and business cards in a way that is very organized and easy to access. I cringe when I see a binder of cards tucked away in sleeves a person bought at Staples. If that is your system, please get rid of it. It will completely hinder the way you do business.

The transparent sleeves business card page, and the three-ring binder are the low-tech solution for what to do with all those business cards. This is a start if you only have a handful of cards to sift through — at least you have them all in one location. Once you start networking heavily, this system becomes ineffective. The biggest problem is that they are usually “organized” only by the chronological order in which you receive them, making retrieval difficult.

Qualities of a Good Contact Database

A system organizes the connections you make through networking, and as you pick up contacts along the way. This is also called your Sphere of Influence, or “SOI.”

A good Contact Database allows you to:

Quickly retrieve a person’s information

Target certain types of buyers based on their criteria

Begin a Private Lender Database to help you raise money down the road (if you are going this route)

Quickly reach out to birddogs. Birddogs are anyone you recruited to help you find deals, motivated sellers, and distressed properties. (More on recruiting birddogs in Chapter 4)

Quickly reach out to other deal sources, where you can bring in more leads for your follow up & analysis.

Most importantly, a good contact database is intuitive to how you work and think. A program that is user-friendly for one person might be confusing or annoying for you to use.

List of Contact Management Databases:

Outlook

Google Contacts/ Gmail

MyMailList Deluxe

Realflow

The 360 Investor

iContact

Cardscan (automatically syncs to Outlook)

Open Road (need to pay)

Microsoft Excel / Spreadsheet Program

DECIDE, COMMIT and PURCHASE an appropriate Contact Database that can fit your needs.

TIP: Do NOT GET discouraged if you’re not a techie – the directions that come with these things now are so simple, even I can understand them. Take some time (but no more than 1 hour) learning how to use your new software, as this is a KEY to building your business.

Buyer Criteria – Segment Your List

After your business set up, building your buyers list – and then QUALIFYING them — is your next step. Your new contact management system is a great way to organize those leads, and any leads you bring in or make through your network. When you do have a deal, all it takes is selecting the right category to blast it out to people looking for, say, a single family rehab, north of Boston.

CREATE CATEGORIES in your Contact Database: To assist you in organizing everything, here are some examples of how to categorize your contact database:

Buyer – Investor Prospect

Buyer – SFH — Northern MA *

Buyer – Multi — 1 to 4

Buyer — Multi – 5 +

Lender – Private & Hard Money

Lender — Private Prospect

Lender – Conventional

Buyer — L / O **

Buyer – Retail Prospect

Buyer – Retail

Attorney

Contractor

Agent – REO & Distressed

Agent

Lender –Mortgage

CPA / Accountant

*SFH: Single Family Home

**L/O: Lease Option

Q: Why distinguish between 1-4 Unit Multis, and 5-unit + Multis?

A: There are different types of financing for 1 to 4 units versus buildings with 5 units and up. Some of your buyers (be they retail or investor-buyers) may use conventional financing, and anything over 4 units is considered a commercial loan. Check with your local mortgage broker for the accurate classification… and make a connection for your power team while you’re at it!

Looking Ahead

While you are looking for the best Contact Database to fit your needs, working habits, and personality, find one that is compatible with a reminder calendar. The best is if you can find one that is able to “time activate” your tasks and other reminders, even your marketing calendar & follow-up schedule if you think you can put it all in one place.

Time activation:

Find one that literally pops up reminders for tasks (Google/Outlook)

Even better if you can sync it with your phone!

We’ll talk more about calendars that time active your tasks in Chapter 4. For now, keep in mind when you are considering programs.

For my recommendations and further details on steps 2 – 5, you’ll have to just buy the system! Just kidding! Although it’s not a bad idea… especially since I built it to pay you up to TEN TIMES the purchase price when you sell me your first wholesale deal, if you’re based in MA & NH!

; – )

What have you found to manage your contacts? What do you like or not like about it? I’m always looking for the latest tech solution!

As I mentioned before, sellers and agents are sometimes insulted by how low my submitted offers are. “Why do you make such low offers, Nick?” you may ask. Well, I do my absolute best to be super transparent and show my seller all my costs involved in the sale, and of course, I explain to them that I also need to make a profit, since this is my business. Happy to share the full details on that in another post, if I haven’t already — oops — take a search!

Today, we’ll consider a new project I recently bought from an experienced and well-regarded wholesaler. In this case, the fudge factor was called into play, before we even started the rehab.

This wholesaler used all of the calculations and checklists I require before he brought me the deal, and when I went to inspect the property myself, I ran all the calculations and checklists myself and was confident we were offering a fair price for both the seller and our own bottom line. And here’s another reason I submit what some people consider “low” offers — it’s the “surprise” or “fudge factor.” And there’s always a surprise! After years of experience, I know first-hand there’s just no way to know what’s lurking below that subfloor or behind that wall.

There is always a surprise!

In this case, we did catch the asbestos in the basement before closing, and both the wholesaler and I reduced the purchase price by $2,500. Good catch.

What we did NOT catch, mainly due to the need to close quickly, was recognizing that the addition may or may not be legal. As part of our closing checklist, we pull the property file at the inspector’s office before we purchase, though rarely, like in this case, we don’t get to it until the day after. (Oops!) It turns out that no permits were pulled when the addition was originally added to the house. We may get away with just completing the interior work and bringing it up to code, but there’s a real chance we may have to demo the whole thing, repour a new foundation with footings, and rebuild it, especially since this is where we plan to locate vital first-floor elements of the home. Either way, this surprise will cost at least an additional $6,000 over our planned rehab budget and possibly as much as $15,000. Even allowing for contingencies, this was one unpleasant surprise!

The moral of the story? If the seller isn’t insulted, your offer is too high. And there’s always a surprise!

Oh — and if the seller is insulted, your number is probably right – and now you need to work on showing them how you got there. At least, that’s what we do.

About AARE Group

We are a real estate acquisition, sales and management company dedicated to helping homeowners solve problems and seeing hidden value while serving investors and leaving neighborhoods better than we found them, since 2005. We do this by buying, selling, and managing single-family and multi-family homes — 150 redevelopment deals and over 50 rental units in New England, Pennsylvania and Florida.